EU court sides with Amazon in $300M tax case
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Amazon.com Inc. has won a key appeal against a 2017 decision by the European Commission, the European Union’s executive branch, that ordered it to pay about €250 million in back taxes to Luxembourg.
The company’s legal victory came in the form of a ruling issued today by the bloc’s second-highest court. The General Court of the European Union ruled that the “contested decision must be annulled in its entirety.”
The beginnings of the legal saga can be traced much further back than the 2017 European Commission decision, to 2006, when Amazon organized its EU operations around two subsidiaries. The first subsidiary, Amazon EU SARL, collected all the company’s e-commerce revenue in the bloc. The subsidiary moved most of the profits from those e-commerce sales to a second, Luxembourg-based Amazon unit called Amazon Europe Holding Technologies SCS that didn’t have to pay taxes.
BRUSSELS (AP) â In the latest setback to European Union efforts to tackle corporate tax avoidance, a court on Wednesday annulled a ruling by the European Commission that a tax deal between the Luxembourg government and Amazon amounted to illegal state support.
The European Commission ordered the U.S. online retailer in 2017 to pay around 250 million euros ($300 million) in back taxes to Luxembourg. But judges at the EU’s General Court said the European Commission didn’t prove âto the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group.”
Amazon wins €250m in EU back tax battle
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In a fight over back taxes, Amazon will not have to pay €250m to the city of Luxembourg, Europe’s second-highest court heard today.
The General Court said that the online retail giant had not received a selective advantage.
“The Commission did not prove to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group,” the judge said.
In its efforts to tackle corporate tax avoidance, the European Commission ordered Amazon EU and Amazon Europe Holding Technologies to pay back the sum in 2017.